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Jobs Program Would Raise Revenue

December 4, 2012

William "Sandy" Darity, Jr

The "fiscal cliff" is a rhetorical device designed to hijack the inauguration of new federal programs that would address our nation's mass unemployment crisis. It distracts us from alternatives to reducing the federal budget deficit by other means than massive federal spending cuts.

Indeed, the fiscal cliff debate has subverted our nation's courage and imagination. Instead of feuding about how deep cuts in federal expenditures should be, Congress should enact a national program of public service employment that will provide a job for every American seeking work.

A federal job guarantee at non-poverty wages (for example, a minimum annual wage of $20,000) for all citizens would enable the nation to meet both its physical and human infrastructure needs. Workers under the public service employment system could repair roads and bridges, provide high quality day care services, build and maintain the public schools and rehabilitate our damaged postal system.

Such a program would address the federal budget deficit primarily by increasing revenues rather than cutting government expenditures. It would restore tax paying capability among Americans who have suffered income losses due to long-term joblessness, thereby restoring state and municipal tax bases. It also would boost income for the private sector which in turn would restore business' tax paying capability. Business incomes would rise for two reasons: 1. The incomes provided through the job guarantee would restore and stabilize consumer purchases and 2. The supplies and materials for the infrastructural projects undertaken by public service employment would be purchased from the private sector. The program even would be beneficial from the expenditure side of the public ledger: spending on entitlement programs (including unemployment insurance and a host of antipoverty and social support programs) could be reduced drastically, replaced by the job guarantee plan.

A large scale public service employment program should have been initiated at the start of the Great Recession, rather than the transfer of huge sums of public money to the investment banking community that actually took place.

It is not too late to adopt a federal job guarantee for all Americans.

This commentary was originally published in The New York Times on Dec. 4, 2012, as part of a "Room for Debate" series.